May’s inflation report gives the RBA an opportunity to continue the monetary easing program. The rate of inflation was moderate – 0.2% in May.
According to TD Securities, the inflation figures were influenced by higher prices on fruit, vegetables and rent while fuels, hotel and local tourist services got cheaper.
The year-over-year inflation rate reached 2,2%, staying around the lower border of the target range set by the RBA (2-3%).
Despite favorable conditions for further economic stimulation, the RBA is unlikely to cut interest rates during the forthcoming meeting since it will keep monitoring the effect of its previous steps. The current weakening of the Australian Dollar will also contribute to that.
A further rally above the 0.9790 high will probably encounter resistance around 0.9853, 0.9954. The current bullish move will be completed as soon as the price overcomes the bottom of the MF sloping channel and consolidates below 0.9569 (as shown below).
The chart below, courtesy of Masterforex-V Academy, reflects the current state of affairs in the market of AUDUSD. The currency pair is currently recovering after the recent decline.
